• Global investing can reduce stock concentration and expand opportunities. The UK market is overwei...
• Global investing can reduce stock concentration and expand opportunities. The UK market is overweight energy and banks but underweight industrials and technology relative to world equities.
• Taking global exposure by investing in a number of regional funds can be hazardous as they may be investing in sub-optimal companies merely because they are within the region ' the
best stock in the region might not be the best in the asset
• Companies now operate and compete on a global basis, so it is important to look at sectors without consideration of national borders.
• Merrill Lynch Global Titans fund uses a stock-picking approach driven by global sector research and typically holds 60-110 stocks.
• The fund seeks to add value by exploiting cross-border pricing anomalies.
• The end of the Iraq war, stability in corporate profits and stimulus from economic policy are all positive for the economic outlook.
• But threats remain from excess capacity, a lack of pricing power, moderation in consumer spending growth and deleveraging by corporates and households.
• This adds up to expectations for low nominal economic growth and a challenging environment for revenue growth.
• The best large companies have: strong franchises or brands that confer pricing power, scale to drive efficiency gains and financial resources for sustained research and development to boost competitive advantages and can enhance value by acquiring distressed assets from competitors.
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